UK Labour Market - Change Recruitment Group
UK Labour Market
September 8th 2016
The most up-to-date source of monthly UK labour market data and analysis
Report on Jobs Permanent staff placements rebound in August The Report on Jobs is a monthly publication produced by IHS Markit and sponsored by the Recruitment and Employment Confederation. The report features original survey data which provide the most up-todate monthly picture of recruitment, employment, staff availability and employee earnings trends available.
Staff Appointments via Recruitment Consultancies 50 = no change on previous month 75 70
Increasing rate of growth
Temp/Contract Billings
65 60 55 50 45 40 Permanent Placements 35
1 Executive summary 2 Appointments
30 Increasing rate of decline
25 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016
3 Vacancies
Key points from the August survey:
4 Sectoral demand
Permanent appointments rise for first time in three months
5 Staff availability
Temp billings increase at fastest pace since May
6 Pay pressures
Permanent salary growth quickens
7 Special feature Commenting on the latest survey results, REC chief executive Kevin Green says:
IHS Markit Henley on Thames Oxon RG9 1HG, UK Tel: +44 1491 461000 Fax: +44 1491 461001 email: [email protected] Copies of the report are available on annual subscription from IHS Markit. For subscription details please contact: [email protected]
“The UK jobs market returned to pre-referendum patterns in August as the initial shock of the vote result subsided. Permanent hiring returned to growth as employers confirmed appointments that had been on hold or delayed in June and July. Starting salaries also improved, with employers having to offer more to attract candidates who might be reluctant to move jobs in the current climate. “Despite this month’s positive data, it is still too early to make conclusions about what impact the vote to leave the EU will have on the jobs market. For example, the fact that vacancy growth has softened is concerning, suggesting that hiring could be volatile over the coming months. “The priority now is to shore up business confidence. Much of this depends on progress the government can make in its difficult task of ensuring that UK businesses have the ability to trade with their neighbours in the EU. Developing an immigration policy which will allow employers to access enough candidates for the jobs available is vital. Employers from the public sector to agriculture and engineering to construction could be adversely affected if access to workers from outside the UK is limited.”
Report on Jobs | Recruitment Industry Survey
1
Executive summary
The Report on Jobs is unique in providing the most comprehensive guide to the UK labour market, drawing on original survey data provided by recruitment consultancies and employers to provide the first indication each month of labour market trends. The main findings for August are:
Permanent placements increase for first time in three months...
Latest data showed a rise in the volume of permanent staff placements during August, following decreases seen in the preceding two months around the Brexit vote. Anecdotal evidence suggested that some panellists had decided to move ahead with hires that had previously been placed on hold.
...while temp billings rise at strongest rate since May
Having eased to a ten-month low in July, growth of shortterm staff billings picked up in August. Panellists indicated that strong client activity levels had underpinned the latest increase.
Permanent salary growth accelerates...
Starting salaries for successful permanent candidates continued to rise in August. The rate of growth was solid and faster than in July, with panellists citing skill shortages and greater numbers of senior-level placements.
Staff Appointments 50 = no change on previous month 70
50=no change on previous month 70
Temp/Contract Billings
65
65
60
60
55
55
50
50
45
45
40
40
35
35
Permanent Placements
30
30
25
25 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016
Demand for staff 50 = no change on previous month 75 70
Increasing rate of growth
Temp/Contract Vacancies
65 60 55 50 45 40
Permanent Vacancies
35 30 Increasing rate of decline
25
1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016
...amid continuing tight candidate availability
The supply of candidates to fill vacancies remained an issue in August, with consultants signalling sharper falls in both permanent and temporary staff availability.
Staff Availability and Earnings Growth 50 = no change on previous month 70 65
50 = no change on previous month (inverted)
Skill shortages (Availability of staff inverted - RHS)
40
60
50
55
60
50
70
45 40
Average permanent salaries (LHS)
35
80 90
1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016
All Intellectual Property Rights owned by IHS Markit
30
Report on Jobs | Recruitment Industry Survey
2
Staff appointments
Recruitment consultancies report on the number of people placed in permanent jobs each month, and their revenues (billings) received from placing people in temporary or contract positions at employers.
Staff Appointments via Recruitment Consultancies 50 = no change on previous month 75 70
60 55
Permanent placements return to growth
50 45
The number of people placed in permanent jobs increased slightly in August, following declines in the previous two months. A number of panellists indicated that decisions on new hires which had been delayed around the Brexit vote had now been confirmed. However, others noted that tight candidate availability remained a brake on activity. Higher permanent placements were recorded across each of the monitored regions apart from London (where the pace of decline eased markedly).
40 35
Permanent Placements
30 Increasing rate of decline
25 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016
Faster rise in temp billings
An index reading above 50 signals a higher number of placements/billings than the previous month. Readings below 50 signal a decline compared with the previous month.
Temp/Contract Billings
65
Recruitment consultants signalled improved trends in both permanent and temporary/contract staff appointments during August.
Agencies’ billings from the employment of temporary/contract staff continued to rise in August. Moreover, the rate of growth accelerated to a three-month high. Higher temp billings were frequently attributed by panellists to rising client activity levels. Growth of short-term staff billings was broad-based by region, with the North posting the fastest rise.
Increasing rate of growth
Permanent Staff Placements Q. Please compare the number of staff placed in permanent positions with the number one month ago.
Higher %
Same %
Lower %
Net +/-
2016 Mar 37.7 Apr 38.1 May 37.1 Jun 33.4 Jul 28.1 Aug 32.5
35.9 34.1 31.5 34.7 34.0 33.7
26.3 27.8 31.4 31.8 37.9 33.8
11.4 10.4 5.7 1.6 -9.8 -1.3
Index S.Adj. 50 = no chg Index
55.7 55.2 52.9 50.8 45.1 49.3
53.7 53.4 52.9 49.3 45.4 51.1
Temporary/Contract Staff Billings Q. Please compare your billings received from the employment of temporary and contract staff with the situation one month ago.
Higher %
Same %
Lower %
Net +/-
2016 Mar 38.6 Apr 34.9 May 35.3 Jun 32.3 Jul 34.3 Aug 35.7
46.8 43.7 42.3 46.3 41.1 40.2
14.6 21.4 22.4 21.4 24.7 24.2
24.0 13.4 12.9 10.9 9.6 11.5
Index S.Adj. 50 = no chg Index
62.0 56.7 56.5 55.4 54.8 55.7
56.4 59.1 56.4 52.3 51.6 54.5
Report on Jobs | Recruitment Industry Survey
3
Vacancies
Recruitment consultants are asked to specify whether the demand for staff from employers has changed on the previous month, thereby providing an indicator of the number of job vacancies. The summary indexes shown in this page are derived from the detailed sector data shown on page 5.
Job Vacancies 50 = no change on previous month 75 70 65 60 55 50 45 40 35 30 25
Vacancy growth eases further
Demand for staff continued to rise in August, but at a slower pace. The Report on Jobs Vacancy Index posted 55.1, down from 55.4 in July. That signalled the least marked rise in demand for 39 months. Permanent staff vacancies increased at a slightly slower pace in August, whereas temp vacancy growth quickened marginally.
Increasing rate of growth
Vacancy Index
Increasing rate of decline
50 = no change on previous month 75 70
Temp/Contract Vacancies
65 60
Public & private sector vacancies
The strongest growth of vacancies was recorded for private sector temporary workers during August. Public sector permanent staff was the only category to see a decline.
55
Increasing rate of growth
50
Increasing rate of decline
45 40
Permanent Vacancies
35
Other vacancy indicators
Latest official data from the Office for National Statistics (ONS) signalled that vacancies rose 0.3% on an annual basis in the three months to July. That was the weakest growth in over four years. Internet-based recruitment spending fell -5.6% on a yearon-year basis in the opening quarter of 2016 – the second consecutive quarterly drop. The Job Vacancies Index monitors the overall demand for staff at recruitment consultancies. An index reading above 50 signals a higher number of vacancies than the previous month. Readings below 50 signal a decline compared with the previous month.
30 25 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016
Job Vacancy Indicators
Apr’16
May
Jun
Jul
Aug
Job Vacancy Index (recruitment industry survey) 50 = no change on previous month Total Permanent Staff Temporary Staff
59.2 59.3 58.1
59.4 59.4 59.5
57.8 57.8 58.1
55.4 55.3 56.6
55.1 55.0 56.8
Public & private sector vacancies (not seasonally adjusted)
Public: perm Public: temp Private: perm Private: temp
48.7 50.7 60.9 60.1
50.7 52.0 62.0 61.9
50.4 53.0 58.6 63.2
51.5 50.3 56.2 58.2
47.1 53.0 55.2 60.2
Job centre vacancies 2.2 Internet recruitment -5.6
2.2 --
1.6 --
0.3 --
n/a --
Other key vacancy data Annual % change
Sources: Job centre vacancies provided by ONS via EcoWin.
Internet recruitment spending provided by WARC.com
All Intellectual Property Rights owned by IHS Markit
Report on Jobs | Recruitment Industry Survey
4
Demand for staff by sector
Recruitment consultancies are requested to compare the demand for staff according to sector with the situation one month ago.
Demand for staff 50 = no change on previous month
90
Permanent staff
Nursing/Medical/Care remained the most sought-after category for permanent staff in August, just ahead of Engineering. Construction was the only category where a decline in demand was reported. This year Rank Aug'16
Nursing/Medical/Care Engineering* IT & Computing Executive/Professional Accounting/Financial Blue Collar Hotel & Catering Secretarial/Clerical Construction*
1 2 3 4 5 6 7 8 9
58.4 58.2 56.1 55.4 55.3 53.7 53.7 52.6 45.7
(Last year) Rank Aug'15
(1) (5) (4) (3) (2) (8) (9) (6) (7)
(71.9) (64.5) (64.9) (65.9) (66.8) (58.3) (57.8) (62.1) (61.9)
Hotel & Catering Engineering* Nursing/Medical/Care Secretarial/Clerical Blue Collar Construction* IT & Computing Accounting/Financial Executive/Professional
his year T Rank Aug'16
1 2 3 4 5 6 7 8 9
61.1 60.9 57.3 57.3 57.1 56.9 53.4 52.1 51.4
70
50
50 T em p
40
30 20
2002 2004 2006 2008 2010 2012 2014 2016
90
Executive & Professional 90
80
80 P erm
70
(Last year) Rank Aug'15
(3) (7) (1) (5) (4) (8) (6) (2) (9)
(61.2) (58.6) (67.5) (59.9) (61.2) (57.5) (59.5) (62.2) (56.8)
*Non-seasonally adjusted data. Prior to April 2013 Engineering/Construction was reported as a single category.
50 T em p
40 30
30 20
2002 2004 2006 2008 2010 2012 2014 2016
90
Blue Collar
2002 2004 2006 2008 2010 2012 2014 2016
Hotel & Catering
80
70
T em p
70
T em p
60
60 50
50 P erm
40
30
30
20
20
2002 2004 2006 2008 2010 2012 2014 2016
90
Nursing/Medical/Care 90
80
80 T em p
70
60
50
50 P erm
40
P erm
2002 2004 2006 2008 2010 2012 2014 2016
Engineering P erm
70
60
T em p
40
30
30 2002 2004 2006 2008 2010 2012 2014 2016
20 2013
90 80
T em p
P erm
40
Construction P erm
70
Data are presented in the form of diffusion indices whereby a reading of 50 indicates no change on the previous month. Readings above 50 signal stronger demand than a month ago. Readings below 50 signal weaker demand than a month ago.
IT & Computing
60
50
20
2002 2004 2006 2008 2010 2012 2014 2016
70
60
40
T em p
40
30
20
P erm
60
80
Growth of demand was broad-based across all monitored categories of temporary/contract staff during August. The fastest rise was signalled for Hotel & Catering workers, followed by Engineering staff.
P erm
60
20
Accounting & Financial
80
70
90
Temporary/contract staff
90
Secretarial & Clerical
80
60 50
T em p
40 30 20 2013
2014
2015
2016
2014
2015
2016
Report on Jobs | Recruitment Industry Survey
5
Staff availability
Recruitment consultants are asked to report whether availability of permanent and temporary staff has changed on the previous month. An overall indicator of staff availability is also calculated.
Staff Availability 50 = no change on previous month
Improving availability
90 80
Availability of permanent staff
Staff Availability Index
70
The availability of staff to fill permanent jobs continued to fall in August. The rate of decline was marked, having accelerated since July. There were some reports from the survey panel of candidates being reluctant to move due to economic uncertainty. Permanent candidate availability fell across all monitored regions, with the South and London seeing the sharpest declines.
60 50 40 30 Deteriorating availability
20
50 = no change on previous month 90
Improving availability
80
Availability of temp/contract staff
70
Temporary/contract staff availability deteriorated further in August. The latest fall was the sharpest in six months and marked overall. Regional data signalled lower temp availability everywhere except Scotland, where a modest increase was reported.
60 50 40 Temp Availability
Permanent Availability
30
Deteriorating availability
20
1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016
Availability of permanent staff Q. Is the availability of candidates for permanent vacancies better, the same or worse than one month ago?
Key permanent staff skills reported in short supply:*
Better %
Same %
Worse %
Net +/-
Index
S.Adj. Index
Accountancy/Financial: Accounts, Audit, Compliance. Blue Collar: HGV Drivers, LGV Drivers. Engineering: Design Engineers, Rail, Structural Engineers. Hotels/Catering: Chefs, Front of House. IT/Computing: Digital Marketing, Embedded Software, Gaming, Information Security, Java, Mobile Developers, .Net. Nursing/Medical/Care: Medical. Secretarial/Clerical: Admin. Other: Business Development, Customer Service, Sales, Scientists, Pharmaceuticals.
2016 Mar 9.1 Apr 12.4 May 10.9 Jun 9.7 Jul 11.7 Aug 10.3
58.9 58.7 59.0 57.8 53.1 49.2
32.1 28.9 30.1 32.5 35.2 40.5
-23.0 -16.5 -19.2 -22.8 -23.5 -30.2
38.5 41.7 40.4 38.6 38.2 34.9
39.9 40.9 41.5 40.7 42.3 40.5
Key temp skills reported in short supply:*
Q. Is the availability of candidates for temporary vacancies better, the same or worse than one month ago?
Accountancy/Financial: Audit, Compliance, Risk. Blue Collar: Electricians, Forklift Drivers, HGV Drivers, LGV Drivers, Painters, Semi-Skilled, Welders. Construction: Construction Workers. Engineering: Rail, Structural Engineers. IT/Computing: Developers, Digital, Gaming, Java, PHP. Other: Call Centre, Customer Service, Pharmaceuticals, Scientists, Telesales. *consultants are invited to specify any areas in which they have encountered skill shortages during the latest month
All Intellectual Property Rights owned by IHS Markit
Availability of temporary/contract staff
Better %
Same %
Worse %
Net +/-
Index
S.Adj. Index
2016 Mar 15.4 Apr 13.5 May 12.0 Jun 16.3 Jul 10.6 Aug 12.3
58.8 63.1 64.6 59.1 61.2 53.4
25.9 23.4 23.3 24.6 28.2 34.2
-10.5 -9.9 -11.3 -8.3 -17.6 -21.9
44.7 45.1 44.3 45.8 41.2 39.0
45.0 45.7 46.0 46.5 43.6 42.3
Report on Jobs | Recruitment Industry Survey
6
Pay pressures
The recruitment industry survey tracks both the average salaries awarded to people placed in permanent jobs each month, as well as average hourly rates of pay for temp/contract staff.
Pay Pressures 50 = no change on previous month 70
Increasing rate of growth
Permanent Salaries 65
Permanent salaries
Average starting salaries for candidates placed in permanent jobs rose further in August. The rate of growth was solid, having accelerated since July. Recruitment consultants attributed higher salaries to shortages of suitable candidates and increased volumes of senior-level placements. Scotland led a broad-based rise in permanent salaries during the latest survey period.
60 55 50 45
Temp/contract pay rates
Hourly rates of pay for staff in temporary/contract employment continued to rise in August. The rate of increase was unchanged since July. Temp pay rose in all regions, with the North seeing the strongest increase.
40
Temp/Contract Hourly Pay Rates Increasing rate of decline
35
1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016
Permanent Salaries Q. Are average salaries awarded to staff placed in permanent positions higher, the same or lower than one month ago?
UK average weekly earnings
Data from the Office for National Statistics indicated that annual growth of employee earnings (including bonuses) quickened to 2.4% in the three months to June 2016. That was the strongest growth in eight months.
Yr/yr % chg in average weekly earnings (3mma) 2013
2014
2015 Mar'16
Apr
May
Jun
Whole economy 1.2
1.2
2.5
2.0
2.0
2.3
2.4
Private sector
1.4
1.4
2.9
2.2
2.1
2.5
2.5
Public sector
0.9
0.3
0.9
1.6
1.7
1.7
1.7
Services
1.1
1.0
2.6
1.7
1.6
2.0
2.0
Manufacturing 2.3
2.2
1.3
1.7
1.7
2.2
2.3
Construction
0.9
4.3
8.3
8.2
8.2
8.4
0.3
9 Public sector 6
3
0 Private sector -3
-6 2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
Same %
Lower %
Net +/-
Index
S.Adj. Index
2016 Feb 22.9 Mar 24.5 Apr 26.0 May 22.0 Jun 17.3 Jul 13.4 Aug 17.8
72.2 70.9 68.8 74.2 78.9 80.4 76.3
5.0 4.5 5.2 3.8 3.7 6.2 5.9
17.9 20.0 20.8 18.2 13.6 7.3 11.8
59.0 60.0 60.4 59.1 56.8 53.6 55.9
59.3 59.9 59.1 58.2 56.8 52.8 55.7
Temporary/Contract Pay Rates Q. Are average hourly pay rates for temporary/contract staff higher, the same or lower than one month ago?
Annual percent change
Higher %
Higher %
Same %
Lower %
Net +/-
Index
S.Adj. Index
2016 Feb 11.1 Mar 16.1 Apr 24.3 May 19.7 Jun 15.7 Jul 12.7 Aug 12.1
82.7 79.5 71.6 75.4 77.9 82.5 83.9
6.1 4.4 4.1 5.0 6.4 4.8 4.0
5.0 11.7 20.2 14.7 9.4 7.8 8.0
52.5 55.9 60.1 57.3 54.7 53.9 54.0
52.8 55.1 60.5 58.2 55.5 54.2 54.2
Report on Jobs | Recruitment Industry Survey
7
Feature Unemployment
UK jobless total drops to 1.64 million Unemployment fell by 52,000 in the second quarter as the labour market performed strongly in the run-up to the EU referendum. The jobless total stood at 1.64 million, its lowest for eight years.
Unemployment rate UK unemploy ment rate (% )
Claimant c ount ('000)
9.0
1700
8.5 8.0
1500
7.5 7.0
1300
6.5
The unemployment rate held steady at a post-recession low of 4.9%, down from 5.6% a year earlier.
6.0 5.5
Unemploy ment rate
5.0
Claimant Count
1100 900
4.5
The latest figures from the Office for National Statistics also showed that the number of people claiming unemployment benefit dropped 8,600 in July to 763,000.
4.0 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016
700
Sourc e: ONS v ia Datas tream.
Driving the improvement was continued strong job creation, with the employment rate climbing to a record high of 74.5% in the three months to June.
The Recruitment & Employment Confederation (REC) is the professional body for the UK’s £28.7 billion recruitment industry. The REC represents 3,349 corporate members who have branches across all regions of the UK. In addition, the REC represents 5,759 individual members within the Institute of Recruitment Professionals (IRP). All members must abide by a code of professional practice. Above all, the REC is committed to raising standards and highlighting excellence throughout the industry. Find out more on www.rec.uk.com.
IHS Markit (Nasdaq: INFO) is a world leader in critical information, analytics and solutions for the major industries and markets that drive economies worldwide. The company delivers next-generation information, analytics and solutions to customers in business, finance and government, improving their operational efficiency and providing deep insights that lead to wellinformed, confident decisions. IHS Markit has more than 50,000 key business and government customers, including 80 percent of the Fortune Global 500 and the world’s leading financial institutions. Headquartered in London, IHS Markit is committed to sustainable, profitable growth. Website: ihsmarkit.com
All Intellectual Property Rights owned by IHS Markit
Recruitment Industry Survey The monthly survey features original research data collected via questionnaire by IHS Markit from a panel of 400 UK recruitment and employment consultancies. In 2014/15, 1,197,928 people were employed in either temporary of contract work through consultancies and 633,992 people were placed in permanent positions through consultancies. Monthly survey data were first collected in October 1997 and are collected in the end of each month, with respondents asked to specify the direction of change in a number of survey variables. IHS Markit do not revise underlying survey data after first publication, but seasonal adjustment factors may be revised from time to time as appropriate which will affect the seasonally adjusted data series. The intellectual property rights to these data are owned by or licensed to IHS Markit. Any unauthorised use, including but not limited to copying, distributing, transmitting or otherwise of any data appearing is not permitted without IHS Markit’s prior consent. The publication or release of any of these data prior to the general release time is an infringement of IHS Markit Economics Limited’s intellectual property rights. IHS Markit shall not have any liability, duty or obligation for or relating to the content or information (“data”) contained herein, any errors, inaccuracies, omissions or delays in the data, or for any actions taken in reliance thereon. In no event shall IHS Markit be liable for any special, incidental, or consequential damages, arising out of the use of the data. Purchasing Managers’ Index® and PMI® are either registered trade marks of Markit Economics Limited or licensed to Markit Economics Limited. IHS Markit is a registered trade mark of IHS Markit Limited.
September 8th 2016
The most up-to-date source of monthly UK labour market data and analysis
Report on Jobs Permanent staff placements rebound in August The Report on Jobs is a monthly publication produced by IHS Markit and sponsored by the Recruitment and Employment Confederation. The report features original survey data which provide the most up-todate monthly picture of recruitment, employment, staff availability and employee earnings trends available.
Staff Appointments via Recruitment Consultancies 50 = no change on previous month 75 70
Increasing rate of growth
Temp/Contract Billings
65 60 55 50 45 40 Permanent Placements 35
1 Executive summary 2 Appointments
30 Increasing rate of decline
25 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016
3 Vacancies
Key points from the August survey:
4 Sectoral demand
Permanent appointments rise for first time in three months
5 Staff availability
Temp billings increase at fastest pace since May
6 Pay pressures
Permanent salary growth quickens
7 Special feature Commenting on the latest survey results, REC chief executive Kevin Green says:
IHS Markit Henley on Thames Oxon RG9 1HG, UK Tel: +44 1491 461000 Fax: +44 1491 461001 email: [email protected] Copies of the report are available on annual subscription from IHS Markit. For subscription details please contact: [email protected]
“The UK jobs market returned to pre-referendum patterns in August as the initial shock of the vote result subsided. Permanent hiring returned to growth as employers confirmed appointments that had been on hold or delayed in June and July. Starting salaries also improved, with employers having to offer more to attract candidates who might be reluctant to move jobs in the current climate. “Despite this month’s positive data, it is still too early to make conclusions about what impact the vote to leave the EU will have on the jobs market. For example, the fact that vacancy growth has softened is concerning, suggesting that hiring could be volatile over the coming months. “The priority now is to shore up business confidence. Much of this depends on progress the government can make in its difficult task of ensuring that UK businesses have the ability to trade with their neighbours in the EU. Developing an immigration policy which will allow employers to access enough candidates for the jobs available is vital. Employers from the public sector to agriculture and engineering to construction could be adversely affected if access to workers from outside the UK is limited.”
Report on Jobs | Recruitment Industry Survey
1
Executive summary
The Report on Jobs is unique in providing the most comprehensive guide to the UK labour market, drawing on original survey data provided by recruitment consultancies and employers to provide the first indication each month of labour market trends. The main findings for August are:
Permanent placements increase for first time in three months...
Latest data showed a rise in the volume of permanent staff placements during August, following decreases seen in the preceding two months around the Brexit vote. Anecdotal evidence suggested that some panellists had decided to move ahead with hires that had previously been placed on hold.
...while temp billings rise at strongest rate since May
Having eased to a ten-month low in July, growth of shortterm staff billings picked up in August. Panellists indicated that strong client activity levels had underpinned the latest increase.
Permanent salary growth accelerates...
Starting salaries for successful permanent candidates continued to rise in August. The rate of growth was solid and faster than in July, with panellists citing skill shortages and greater numbers of senior-level placements.
Staff Appointments 50 = no change on previous month 70
50=no change on previous month 70
Temp/Contract Billings
65
65
60
60
55
55
50
50
45
45
40
40
35
35
Permanent Placements
30
30
25
25 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016
Demand for staff 50 = no change on previous month 75 70
Increasing rate of growth
Temp/Contract Vacancies
65 60 55 50 45 40
Permanent Vacancies
35 30 Increasing rate of decline
25
1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016
...amid continuing tight candidate availability
The supply of candidates to fill vacancies remained an issue in August, with consultants signalling sharper falls in both permanent and temporary staff availability.
Staff Availability and Earnings Growth 50 = no change on previous month 70 65
50 = no change on previous month (inverted)
Skill shortages (Availability of staff inverted - RHS)
40
60
50
55
60
50
70
45 40
Average permanent salaries (LHS)
35
80 90
1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016
All Intellectual Property Rights owned by IHS Markit
30
Report on Jobs | Recruitment Industry Survey
2
Staff appointments
Recruitment consultancies report on the number of people placed in permanent jobs each month, and their revenues (billings) received from placing people in temporary or contract positions at employers.
Staff Appointments via Recruitment Consultancies 50 = no change on previous month 75 70
60 55
Permanent placements return to growth
50 45
The number of people placed in permanent jobs increased slightly in August, following declines in the previous two months. A number of panellists indicated that decisions on new hires which had been delayed around the Brexit vote had now been confirmed. However, others noted that tight candidate availability remained a brake on activity. Higher permanent placements were recorded across each of the monitored regions apart from London (where the pace of decline eased markedly).
40 35
Permanent Placements
30 Increasing rate of decline
25 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016
Faster rise in temp billings
An index reading above 50 signals a higher number of placements/billings than the previous month. Readings below 50 signal a decline compared with the previous month.
Temp/Contract Billings
65
Recruitment consultants signalled improved trends in both permanent and temporary/contract staff appointments during August.
Agencies’ billings from the employment of temporary/contract staff continued to rise in August. Moreover, the rate of growth accelerated to a three-month high. Higher temp billings were frequently attributed by panellists to rising client activity levels. Growth of short-term staff billings was broad-based by region, with the North posting the fastest rise.
Increasing rate of growth
Permanent Staff Placements Q. Please compare the number of staff placed in permanent positions with the number one month ago.
Higher %
Same %
Lower %
Net +/-
2016 Mar 37.7 Apr 38.1 May 37.1 Jun 33.4 Jul 28.1 Aug 32.5
35.9 34.1 31.5 34.7 34.0 33.7
26.3 27.8 31.4 31.8 37.9 33.8
11.4 10.4 5.7 1.6 -9.8 -1.3
Index S.Adj. 50 = no chg Index
55.7 55.2 52.9 50.8 45.1 49.3
53.7 53.4 52.9 49.3 45.4 51.1
Temporary/Contract Staff Billings Q. Please compare your billings received from the employment of temporary and contract staff with the situation one month ago.
Higher %
Same %
Lower %
Net +/-
2016 Mar 38.6 Apr 34.9 May 35.3 Jun 32.3 Jul 34.3 Aug 35.7
46.8 43.7 42.3 46.3 41.1 40.2
14.6 21.4 22.4 21.4 24.7 24.2
24.0 13.4 12.9 10.9 9.6 11.5
Index S.Adj. 50 = no chg Index
62.0 56.7 56.5 55.4 54.8 55.7
56.4 59.1 56.4 52.3 51.6 54.5
Report on Jobs | Recruitment Industry Survey
3
Vacancies
Recruitment consultants are asked to specify whether the demand for staff from employers has changed on the previous month, thereby providing an indicator of the number of job vacancies. The summary indexes shown in this page are derived from the detailed sector data shown on page 5.
Job Vacancies 50 = no change on previous month 75 70 65 60 55 50 45 40 35 30 25
Vacancy growth eases further
Demand for staff continued to rise in August, but at a slower pace. The Report on Jobs Vacancy Index posted 55.1, down from 55.4 in July. That signalled the least marked rise in demand for 39 months. Permanent staff vacancies increased at a slightly slower pace in August, whereas temp vacancy growth quickened marginally.
Increasing rate of growth
Vacancy Index
Increasing rate of decline
50 = no change on previous month 75 70
Temp/Contract Vacancies
65 60
Public & private sector vacancies
The strongest growth of vacancies was recorded for private sector temporary workers during August. Public sector permanent staff was the only category to see a decline.
55
Increasing rate of growth
50
Increasing rate of decline
45 40
Permanent Vacancies
35
Other vacancy indicators
Latest official data from the Office for National Statistics (ONS) signalled that vacancies rose 0.3% on an annual basis in the three months to July. That was the weakest growth in over four years. Internet-based recruitment spending fell -5.6% on a yearon-year basis in the opening quarter of 2016 – the second consecutive quarterly drop. The Job Vacancies Index monitors the overall demand for staff at recruitment consultancies. An index reading above 50 signals a higher number of vacancies than the previous month. Readings below 50 signal a decline compared with the previous month.
30 25 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016
Job Vacancy Indicators
Apr’16
May
Jun
Jul
Aug
Job Vacancy Index (recruitment industry survey) 50 = no change on previous month Total Permanent Staff Temporary Staff
59.2 59.3 58.1
59.4 59.4 59.5
57.8 57.8 58.1
55.4 55.3 56.6
55.1 55.0 56.8
Public & private sector vacancies (not seasonally adjusted)
Public: perm Public: temp Private: perm Private: temp
48.7 50.7 60.9 60.1
50.7 52.0 62.0 61.9
50.4 53.0 58.6 63.2
51.5 50.3 56.2 58.2
47.1 53.0 55.2 60.2
Job centre vacancies 2.2 Internet recruitment -5.6
2.2 --
1.6 --
0.3 --
n/a --
Other key vacancy data Annual % change
Sources: Job centre vacancies provided by ONS via EcoWin.
Internet recruitment spending provided by WARC.com
All Intellectual Property Rights owned by IHS Markit
Report on Jobs | Recruitment Industry Survey
4
Demand for staff by sector
Recruitment consultancies are requested to compare the demand for staff according to sector with the situation one month ago.
Demand for staff 50 = no change on previous month
90
Permanent staff
Nursing/Medical/Care remained the most sought-after category for permanent staff in August, just ahead of Engineering. Construction was the only category where a decline in demand was reported. This year Rank Aug'16
Nursing/Medical/Care Engineering* IT & Computing Executive/Professional Accounting/Financial Blue Collar Hotel & Catering Secretarial/Clerical Construction*
1 2 3 4 5 6 7 8 9
58.4 58.2 56.1 55.4 55.3 53.7 53.7 52.6 45.7
(Last year) Rank Aug'15
(1) (5) (4) (3) (2) (8) (9) (6) (7)
(71.9) (64.5) (64.9) (65.9) (66.8) (58.3) (57.8) (62.1) (61.9)
Hotel & Catering Engineering* Nursing/Medical/Care Secretarial/Clerical Blue Collar Construction* IT & Computing Accounting/Financial Executive/Professional
his year T Rank Aug'16
1 2 3 4 5 6 7 8 9
61.1 60.9 57.3 57.3 57.1 56.9 53.4 52.1 51.4
70
50
50 T em p
40
30 20
2002 2004 2006 2008 2010 2012 2014 2016
90
Executive & Professional 90
80
80 P erm
70
(Last year) Rank Aug'15
(3) (7) (1) (5) (4) (8) (6) (2) (9)
(61.2) (58.6) (67.5) (59.9) (61.2) (57.5) (59.5) (62.2) (56.8)
*Non-seasonally adjusted data. Prior to April 2013 Engineering/Construction was reported as a single category.
50 T em p
40 30
30 20
2002 2004 2006 2008 2010 2012 2014 2016
90
Blue Collar
2002 2004 2006 2008 2010 2012 2014 2016
Hotel & Catering
80
70
T em p
70
T em p
60
60 50
50 P erm
40
30
30
20
20
2002 2004 2006 2008 2010 2012 2014 2016
90
Nursing/Medical/Care 90
80
80 T em p
70
60
50
50 P erm
40
P erm
2002 2004 2006 2008 2010 2012 2014 2016
Engineering P erm
70
60
T em p
40
30
30 2002 2004 2006 2008 2010 2012 2014 2016
20 2013
90 80
T em p
P erm
40
Construction P erm
70
Data are presented in the form of diffusion indices whereby a reading of 50 indicates no change on the previous month. Readings above 50 signal stronger demand than a month ago. Readings below 50 signal weaker demand than a month ago.
IT & Computing
60
50
20
2002 2004 2006 2008 2010 2012 2014 2016
70
60
40
T em p
40
30
20
P erm
60
80
Growth of demand was broad-based across all monitored categories of temporary/contract staff during August. The fastest rise was signalled for Hotel & Catering workers, followed by Engineering staff.
P erm
60
20
Accounting & Financial
80
70
90
Temporary/contract staff
90
Secretarial & Clerical
80
60 50
T em p
40 30 20 2013
2014
2015
2016
2014
2015
2016
Report on Jobs | Recruitment Industry Survey
5
Staff availability
Recruitment consultants are asked to report whether availability of permanent and temporary staff has changed on the previous month. An overall indicator of staff availability is also calculated.
Staff Availability 50 = no change on previous month
Improving availability
90 80
Availability of permanent staff
Staff Availability Index
70
The availability of staff to fill permanent jobs continued to fall in August. The rate of decline was marked, having accelerated since July. There were some reports from the survey panel of candidates being reluctant to move due to economic uncertainty. Permanent candidate availability fell across all monitored regions, with the South and London seeing the sharpest declines.
60 50 40 30 Deteriorating availability
20
50 = no change on previous month 90
Improving availability
80
Availability of temp/contract staff
70
Temporary/contract staff availability deteriorated further in August. The latest fall was the sharpest in six months and marked overall. Regional data signalled lower temp availability everywhere except Scotland, where a modest increase was reported.
60 50 40 Temp Availability
Permanent Availability
30
Deteriorating availability
20
1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016
Availability of permanent staff Q. Is the availability of candidates for permanent vacancies better, the same or worse than one month ago?
Key permanent staff skills reported in short supply:*
Better %
Same %
Worse %
Net +/-
Index
S.Adj. Index
Accountancy/Financial: Accounts, Audit, Compliance. Blue Collar: HGV Drivers, LGV Drivers. Engineering: Design Engineers, Rail, Structural Engineers. Hotels/Catering: Chefs, Front of House. IT/Computing: Digital Marketing, Embedded Software, Gaming, Information Security, Java, Mobile Developers, .Net. Nursing/Medical/Care: Medical. Secretarial/Clerical: Admin. Other: Business Development, Customer Service, Sales, Scientists, Pharmaceuticals.
2016 Mar 9.1 Apr 12.4 May 10.9 Jun 9.7 Jul 11.7 Aug 10.3
58.9 58.7 59.0 57.8 53.1 49.2
32.1 28.9 30.1 32.5 35.2 40.5
-23.0 -16.5 -19.2 -22.8 -23.5 -30.2
38.5 41.7 40.4 38.6 38.2 34.9
39.9 40.9 41.5 40.7 42.3 40.5
Key temp skills reported in short supply:*
Q. Is the availability of candidates for temporary vacancies better, the same or worse than one month ago?
Accountancy/Financial: Audit, Compliance, Risk. Blue Collar: Electricians, Forklift Drivers, HGV Drivers, LGV Drivers, Painters, Semi-Skilled, Welders. Construction: Construction Workers. Engineering: Rail, Structural Engineers. IT/Computing: Developers, Digital, Gaming, Java, PHP. Other: Call Centre, Customer Service, Pharmaceuticals, Scientists, Telesales. *consultants are invited to specify any areas in which they have encountered skill shortages during the latest month
All Intellectual Property Rights owned by IHS Markit
Availability of temporary/contract staff
Better %
Same %
Worse %
Net +/-
Index
S.Adj. Index
2016 Mar 15.4 Apr 13.5 May 12.0 Jun 16.3 Jul 10.6 Aug 12.3
58.8 63.1 64.6 59.1 61.2 53.4
25.9 23.4 23.3 24.6 28.2 34.2
-10.5 -9.9 -11.3 -8.3 -17.6 -21.9
44.7 45.1 44.3 45.8 41.2 39.0
45.0 45.7 46.0 46.5 43.6 42.3
Report on Jobs | Recruitment Industry Survey
6
Pay pressures
The recruitment industry survey tracks both the average salaries awarded to people placed in permanent jobs each month, as well as average hourly rates of pay for temp/contract staff.
Pay Pressures 50 = no change on previous month 70
Increasing rate of growth
Permanent Salaries 65
Permanent salaries
Average starting salaries for candidates placed in permanent jobs rose further in August. The rate of growth was solid, having accelerated since July. Recruitment consultants attributed higher salaries to shortages of suitable candidates and increased volumes of senior-level placements. Scotland led a broad-based rise in permanent salaries during the latest survey period.
60 55 50 45
Temp/contract pay rates
Hourly rates of pay for staff in temporary/contract employment continued to rise in August. The rate of increase was unchanged since July. Temp pay rose in all regions, with the North seeing the strongest increase.
40
Temp/Contract Hourly Pay Rates Increasing rate of decline
35
1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016
Permanent Salaries Q. Are average salaries awarded to staff placed in permanent positions higher, the same or lower than one month ago?
UK average weekly earnings
Data from the Office for National Statistics indicated that annual growth of employee earnings (including bonuses) quickened to 2.4% in the three months to June 2016. That was the strongest growth in eight months.
Yr/yr % chg in average weekly earnings (3mma) 2013
2014
2015 Mar'16
Apr
May
Jun
Whole economy 1.2
1.2
2.5
2.0
2.0
2.3
2.4
Private sector
1.4
1.4
2.9
2.2
2.1
2.5
2.5
Public sector
0.9
0.3
0.9
1.6
1.7
1.7
1.7
Services
1.1
1.0
2.6
1.7
1.6
2.0
2.0
Manufacturing 2.3
2.2
1.3
1.7
1.7
2.2
2.3
Construction
0.9
4.3
8.3
8.2
8.2
8.4
0.3
9 Public sector 6
3
0 Private sector -3
-6 2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
Same %
Lower %
Net +/-
Index
S.Adj. Index
2016 Feb 22.9 Mar 24.5 Apr 26.0 May 22.0 Jun 17.3 Jul 13.4 Aug 17.8
72.2 70.9 68.8 74.2 78.9 80.4 76.3
5.0 4.5 5.2 3.8 3.7 6.2 5.9
17.9 20.0 20.8 18.2 13.6 7.3 11.8
59.0 60.0 60.4 59.1 56.8 53.6 55.9
59.3 59.9 59.1 58.2 56.8 52.8 55.7
Temporary/Contract Pay Rates Q. Are average hourly pay rates for temporary/contract staff higher, the same or lower than one month ago?
Annual percent change
Higher %
Higher %
Same %
Lower %
Net +/-
Index
S.Adj. Index
2016 Feb 11.1 Mar 16.1 Apr 24.3 May 19.7 Jun 15.7 Jul 12.7 Aug 12.1
82.7 79.5 71.6 75.4 77.9 82.5 83.9
6.1 4.4 4.1 5.0 6.4 4.8 4.0
5.0 11.7 20.2 14.7 9.4 7.8 8.0
52.5 55.9 60.1 57.3 54.7 53.9 54.0
52.8 55.1 60.5 58.2 55.5 54.2 54.2
Report on Jobs | Recruitment Industry Survey
7
Feature Unemployment
UK jobless total drops to 1.64 million Unemployment fell by 52,000 in the second quarter as the labour market performed strongly in the run-up to the EU referendum. The jobless total stood at 1.64 million, its lowest for eight years.
Unemployment rate UK unemploy ment rate (% )
Claimant c ount ('000)
9.0
1700
8.5 8.0
1500
7.5 7.0
1300
6.5
The unemployment rate held steady at a post-recession low of 4.9%, down from 5.6% a year earlier.
6.0 5.5
Unemploy ment rate
5.0
Claimant Count
1100 900
4.5
The latest figures from the Office for National Statistics also showed that the number of people claiming unemployment benefit dropped 8,600 in July to 763,000.
4.0 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016
700
Sourc e: ONS v ia Datas tream.
Driving the improvement was continued strong job creation, with the employment rate climbing to a record high of 74.5% in the three months to June.
The Recruitment & Employment Confederation (REC) is the professional body for the UK’s £28.7 billion recruitment industry. The REC represents 3,349 corporate members who have branches across all regions of the UK. In addition, the REC represents 5,759 individual members within the Institute of Recruitment Professionals (IRP). All members must abide by a code of professional practice. Above all, the REC is committed to raising standards and highlighting excellence throughout the industry. Find out more on www.rec.uk.com.
IHS Markit (Nasdaq: INFO) is a world leader in critical information, analytics and solutions for the major industries and markets that drive economies worldwide. The company delivers next-generation information, analytics and solutions to customers in business, finance and government, improving their operational efficiency and providing deep insights that lead to wellinformed, confident decisions. IHS Markit has more than 50,000 key business and government customers, including 80 percent of the Fortune Global 500 and the world’s leading financial institutions. Headquartered in London, IHS Markit is committed to sustainable, profitable growth. Website: ihsmarkit.com
All Intellectual Property Rights owned by IHS Markit
Recruitment Industry Survey The monthly survey features original research data collected via questionnaire by IHS Markit from a panel of 400 UK recruitment and employment consultancies. In 2014/15, 1,197,928 people were employed in either temporary of contract work through consultancies and 633,992 people were placed in permanent positions through consultancies. Monthly survey data were first collected in October 1997 and are collected in the end of each month, with respondents asked to specify the direction of change in a number of survey variables. IHS Markit do not revise underlying survey data after first publication, but seasonal adjustment factors may be revised from time to time as appropriate which will affect the seasonally adjusted data series. The intellectual property rights to these data are owned by or licensed to IHS Markit. Any unauthorised use, including but not limited to copying, distributing, transmitting or otherwise of any data appearing is not permitted without IHS Markit’s prior consent. The publication or release of any of these data prior to the general release time is an infringement of IHS Markit Economics Limited’s intellectual property rights. IHS Markit shall not have any liability, duty or obligation for or relating to the content or information (“data”) contained herein, any errors, inaccuracies, omissions or delays in the data, or for any actions taken in reliance thereon. In no event shall IHS Markit be liable for any special, incidental, or consequential damages, arising out of the use of the data. Purchasing Managers’ Index® and PMI® are either registered trade marks of Markit Economics Limited or licensed to Markit Economics Limited. IHS Markit is a registered trade mark of IHS Markit Limited.
